Protecting Trade Secrets In The Age Of AI
AI agents create new trade secret risks by allowing employees to access expertise or inadvertently expose proprietary information through personal devices. In this guest commentary, Seth Kugler, a partner at Grellas Shah LLP, warns companies that they should adopt strict AI policies, restrict data access on unmanaged devices, update confidentiality agreements, and act immediately when misuse is…
In a recent federal trade secrets case, a former senior employee of a marketing agency was accused of stealing client lists and using stolen trade secrets to train an AI agent. This practice enables individuals to compete in industries where they lack experience, making proprietary data more vulnerable than ever. The plaintiff's attorney, Seth Kugler, emphasized that once AI is involved, it becomes difficult to undo the contamination of trade secrets within the model.
Personal devices and standard IT audits are not enough to prevent these breaches; full forensic imaging of personal devices and intense expert analysis are now necessary to prove theft in AI contexts. To protect their business, founders should implement strict agentic AI policies, eliminate remote access from unmanaged devices, and rewrite their Confidential Information and Invention Assignment Agreements to address AI use explicitly.
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